Foundational Economy


The Foundational Economy has core links with a sustainable future for Wales. Cynnal Cymru is working with partners to take this forward...

Foundational Economy

The Foundational Economy is relevant to both policy-makers and place-makers. Cynnal Cymru works with both to explore and explain why this part of the economy matters to sustainability.

The Foundational Economy covers those areas of the economy that provide the goods and services essential for everyday life.

Health and social care, food, housing, energy and utilities, construction, retailers on the high street and tourism are all areas [or ‘zones’] of the foundational economy.

These goods and services are generally provided by public bodies; (directly or through funding outsourced activities); small and medium enterprise (SME) firms; and much larger companies such as privatised utilities or branches of mobile companies such as the major supermarkets.

The presence – or absence – of a thriving local foundational economy can have a profound impact on places and the communities that they support in terms of goods, services, distribution of income and skills and job opportunities.

Why does the Foundational Economy matter?

  • FE is the part of the economy providing for essential human needs, regardless of geography, income or status
  • Estimates suggest that the foundational economy provides four in every ten jobs in Wales and receives £1 in every three that we spend
  • The businesses and institutions within the FE have a major role to play in helping tackle the nature and climate emergencies, through the ways that they help influence supply chains and customers, as well as through their own operations
  • In some parts of Wales the ‘foundational economy’ is the economy.

A Foundational Economy built on principles of Fair Work and functioning within climate and environmental limits is key to achieving a Prosperous, Resilient, Healthier and More Equal Wales.

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The Centre for Local Economic Strategies (CLES)

The Centre for Local Economic Strategies (CLES) is a Manchester based charity working to develop local economies for the benefit of local people, place and planet. CLES works with organisations and people who make up and have influence over local economies, bringing them together and providing support to devise solutions and deliver positive change. CLES’s practice-based research explores different routes and best practice to achieve this.

Foundational Economy Research Ltd (FERL)

Foundational Economy Research Ltd (FERL) is an action research agency producing analysis to improve understanding of the foundational economy and offering practical ways of improving its function for producers and the public. FERL works with and for government, third sector and trade bodies, building partnerships to support long term implementation of its research.

Explore our research articles

A low carbon economy 

Since 2020, Cynnal Cymru has facilitated a community of practice on behalf of Welsh Government exploring how to grow and support the foundational economy. Its main areas of focus cover Housing, Social Care, Food and Future Skills.

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The case studies and blogs below share insights into some of the different approaches that have been taken to support the foundational economy in Wales and to reshape or strengthen its sectors and communities.

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Simply Do Ideas: Helping Wales lead the way in public sector innovation

Digital innovation platform, Simply Do Ideas, received support from the Foundational Economy Challenge Fund in January 2020. The funding was used to address key barriers that public sector organisations face when innovating and which can often prevent them from accessing the best ideas to solve strategic organisational challenges. Here is the result…

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Cynnal Cymru facilitates a community of practice on the foundational economy on behalf of Welsh Government. It focuses on core foundational sectors of Food, Social Care and Future Skills.

The FE CoP meets regularly to exchange knowledge, share learning and encourage innovation. A key role is to help broker links between projects and partners from all sectors with a view to practical problem-solving and collaboration. The meetings are member-led and highly participative, with representatives from local authority and housing association backgrounds, training providers, community organisations and third sector networks and Welsh Government officials.

If you would be interested in joining a session or finding out more, please get in contact via


The Foundational Economy Community of Practice started in July 2020 as part of the Welsh Government’s Foundational Economy Challenge Fund. Its aim was to share learning and innovation, build relationships and encourage collaboration.

The Challenge Fund provided support to projects looking to try out new ways to address challenges – some emerging, some age-old – faced by foundational economy businesses or those relying on their services.

These included:

  • the recruitment, retention and skills of the workforce
  • the delivery structures and design of services
  • the recruitment, retention and skills of the workforce
  • the delivery structures and design of services

The aim was to explore a range of solutions that could potentially generate viable, adaptable models that could be scaled up and spread to strengthen local economies and community wealth-building.

Staring in 2019 with an initial 52 projects, it was always expected that some experiments would not succeed and conditions were made even more challenging by the impact of the pandemic.

A community of practice was also however put in place to help capture some of the rich learning and insights generated by all the projects taking part. The examples in the case studies below give a flavour of the projects supported by the Fund – their successes, challenges and above all learning, about how best the foundational economy in their area or sector can be supported. The Fund closed in March 2021 but, at the request of members, the community of practice has continued. Its role continues to be to share learning, encourage and expand dialogue and facilitate collaboration.

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Clare Sain-Ley-Berry

Interim Director

Clare has a background in delivering partnership projects for the natural environment and sustainable resource use, applying this to help shape our policy and development work. She enjoys facilitating collaboration across sectors and devising practical programmes to deliver strategic aims.

Clare leads on Cynnal Cymru’s work for a thriving natural environment, which includes our Nature Wise eco literacy training, as well as contributing to work around the foundational economy and decarbonisation.

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